Although forex is working 24 hours a day, we divide it on 4 trading sessions. We also know that market higher its volumes with openning of major stock exchanges, like NYSE, and that volumes falls with the stock closure.
Why is it happening? How it can be useful?
I like to watch on DJIA index because its movement highly correlate with USD index. It is often seen that with falling of DJIA the USD begins to grow and vice-versa. If we look from the sidelines it seems a little weird: national currency falls when stocks are growing.
This is happening because people invest all their USD into stocks. Everybody wants to get rid of dollars making its rate fall. That way companies do not automatically become a lot wealthier. It's just a cash flow. The price of a company is calculated based on what company is actually doing. That means that globally price of a company remains approximately the same if we convert it to any other currency for comparison.
We can use this fact for USD rate forecast on forex. Make a technical analysis of DJIA and see if it's going to hit any support/resistance line. If it is the case then you should consider a reflection on forex market. The correlation between Eur/Usd and DJIA also might help you in trading.
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